US consultant admits role in France's 'Karachi affair'

A US political consultant has admitted being paid by an intermediary in 1994 arms sales for advising the campaign of French presidential hopeful Édouard Balladur. The admission may shed new light on the scandal known as the “Karachi affair”.

A US political consultant has offered new revelations into allegations that a former French prime minister used kickbacks from foreign arms sales to fund his 1995 presidential campaign, according to new reports by French media.

Paul Manafort, who advised US presidents Ronald Reagan and George Bush in the 1980s, has told French investigators that he was paid by a middleman in 1994 arms sales for advising the then presidential hopeful Édouard Balladur (pictured main).

PARALLEL CRIMINAL PROBE

In a separate but related investigation, French investigative judges are looking into whether a 2002 bombing in Karachi that killed 15 people, including 11 French engineers, was carried out in retribution for the termination of a complex submarine sales kickback scheme.

Investigative judges in France are trying to establish if two middlemen hired to help sell French attack submarines to Pakistan’s navy in the early 1990s illegally channelled funds back to Balladur’s campaign team. The scandal became known as the "Karachi affair".

Manafort could now prove to be a key link connecting Balladur with the middlemen, the left-leaning Libération daily and the AFP news agency reported over the weekend.

Manafort confirmed that he was paid the sums of 39,000 euros ($52,000) and 26,000 euros ($34,975) for conducting an opinion poll and for preparing a campaign strategy for Balladur’s team.

The payments to Manafort came from a bank account held by Abdul Rahman el-Assir, one of the two middlemen in the submarine deal.

Manafort also said that he travelled to France and met with Balladur’s entourage to present his ideas. His translator during the meeting was the second intermediary, Ziad Takieddine.

On June 20, Takieddine, who is currently in jail for trying to procure a false passport, admitted to judges that he delivered illegal funds to people close to Balladur to fund his presidential bid.

Manafort and his associates also received additional payments from el-Assir’s bank account in 2000 and 2001, well after the election in question.

Members of Balladur’s old campaign team have denied ever meeting the American or soliciting his advice in the 1995 presidential race.

Balladur himself has denied any wrongdoing, saying France’s Council of State cleared his campaign of any faulty financial accounting years ago.

But he is likely to be questioned by judges before the end of the year, according to Libération.